The Future of Online Shopping: 10 Trends to Watch

Shopping online is about to explode. Retailers of all types are expanding product offerings, adding in-store pickup, free shipping and experimenting with social media. It’s getting harder to tell pure play Internet retailers from the bricks and mortar shops with online portals, and all of them are reinventing how we’ll shop online in the future.

Be it via a mobile device, tablet computer, in-store kiosk or computer, the lines are blurring and the result will be both good and bad for consumers.

First the bad. Much of the activity and expansion is the indirect result of new legislation requiring Internet retailers to collect sales tax. There already are 12 states with laws either enacted or awaiting approval, and now Senator Dick Durbin of Illinois is hoping to pass such a law at the national level.

There’s no telling when, or even if the legislation will pass, but there’s also no turning back the tide. It will happen and online shoppers will be required to pay sales tax, sooner or later.

But the prospect of an even playing field has emboldened traditional retailers, many of whom are becoming more aggressive in capturing online sales. We’re seeing retailers like L.L Bean launch free shipping on all items, Macy’s on purchases of $99 or more, Walmart buying social media platform Kosmix for $300 million and opening up @Walmartlabs to further build its online business, and Toys R Us announcing a new 300,000 sq. ft. distribution center to support internet sales.

Because if traditional retailers are to compete with sites like Amazon – which flourished in the absence of regulation — they must implement some of the same benefits like free shipping, liberal return policies, varied product selection and customer reviews.

It’s going to be a great year for online retail. Here are 10 trends to watch:

In-store pick up. In the past few months we’ve seen Walmart implement in-store pick up for orders placed online, while Sears and Kmart are going a step further bringing online purchases out to your car. In Chicago, Sears and Kmart are even testing home delivery and bundling items with those from its retail partners at Sears’ Marketplace, further blurring the lines between online only retailers and those that came before. And in Florida, Farm Stores lets shoppers order groceries online and pick up at a drive through.

Pick up depots. Smaller retailers without a vast network of stores like Walmart or Sears may open designated pick up locations for goods ordered online. Retail consultant Neil Stern of McMillan/Doolittle points to French retailer Chronodrive.com as an example.

Mobile Apps. Smartphones are the dominant cell phone and apps for all platforms are growing. The ones that allow for price comparisons or send out coupons are already among the most heavily used with good reviews, but we’re just getting started.

Less flash more function. Forget about flashy apps or features like virtual dressing rooms. Consumers haven’t responded to these and rightly so. Maybe the technology will get there, but until it does, user reviews are better gauges of clothing fit and quality than any technology can offer.

Video. Look for more user-generated video on retail sites. Retailers are letting customers upload video clips modeling new clothes or using a new purchase. Davis believes this is one trend that will definitely pick up speed.

Social networking. Facebook and Twitter aren’t even close to played out yet. Consumers can increasingly “like” or follow a favorite retailer and get discounts or tips on deals. JCPenney is using Facebook to actually sell goods and more than 12 million consumers “like” Victoria’s Secret on Facebook as of last month (March), making it the most popular retailer on the site (its Pink brand ranks No. 2, according to the ChannelAdvisor Facebook Commerce Index). That’s an active population of customers reaching out and requesting information from the retailer. And social shopping is just getting started, says Jim Okamura, managing partner at Okamura Consulting, a group specializing in online retail. “There’s evidence (that Facebook offers) a good return on investment and there are a lot of retailers that haven’t done anything yet,” he says. “This is going to be the year of Facebook testing.

Daily deals and flash sales. This may seem like a very crowded playing field, but sites like Ruelala and OneKingsLane are reproducing at a furious pace. And based on how quickly many items sell out, often within minutes of email notifications going out, more will jump on this popular trend.

Retail based social networks. This is one trend experts don’t expect to happen at any large level. Sears is still trying to build a social network of its own customers and Walmart tried and abandoned a similar effort, neither attempt bodes well for its success. Facebook really owns this space, but look for small, focused sites to create communities of like-minded users, says Okamura.

International. “There’s been an accelerating trend in international or cross border e commerce, of small niche online retailers are now doing 10-20% of their sales outside of their own country,” says Okamura. Look to online shops like SousVide Supreme that sells specialized cooking equipment and StyleTrek.com, a community built to launch up and coming international designers as models. Other big name retailers like Zara and Top Shop are building out their online business to reach U.S. shoppers, even as the store base grows more slowly.

Deal aggregators. Of course there are always deal sites, like Dealnews, ConsumerSearch, FatWallet and Brad’s Deals that are cutting through the din of so many sites and sales to bring consumers only the information they’re interested in.

And according to Don Davis, editor of trade magazine Internet Retailer, there’s one more positive side effect for shoppers: the in-store experience is likely to become better as online shopping grows. As it becomes easier to compare prices, stores will be forced to create better physical experiences with more knowledgeable sales staff and proprietary items hard to find anywhere else. On one thing all our experts agreed. There will be more choices for consumers. More things to buy, more ways to compare products and prices, and more methods to evaluate goods.

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